The Future For Media Companies Must Be Flexible, Says NAGRA Report By Troy Dreier, Contributor, Streaming & Digital
Monday, July 22, 2019 - 1:18 pm
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Does the future of sports viewing belong to traditional broadcast services or over-the-top streamers? A report created by NAGRA and research and strategy consultancy MTM, The Global Market for Premium Sports OTT Services, says it's not that simple. To keep sports loyalists happy while appealing to new fans, pay TV companies need to be flexible and come up with new forms of viewing that lets fans keep their big screen experience while adding options and depth through other screens.
Simon Trudelle, Senior Director of Product Marketing, NAGRA
For tier one leagues, the present and future is very much with broadcast, but that doesn't mean they can rely on the status quo. Yes, the pay TV operators are unlikely to let their rights go without a fight, but cord-cutting has created a new reality where some viewers can't be reached by pay TV. Streaming services are picking up some tier one rights, although they're more active with tier two and three leagues. OTT services are able to offer fans lower priced options that are also more convenient.
Operators need to see the opportunity in these changing conditions and create packages that combine pay TV and streaming viewing, super-serving fans by letting them get exactly the content they want and more of it than they could before.
Our feeling is that pay TV providers working closely with the sports organizations have to probably build some more flexible packages, says Simon Trudelle, senior director of product marketing at NAGRA and its director of anti-piracy services. It's a matter of pricing and packaging to keep subscribers and adapt to these more specific vertical needs of some consumer segments.
For pay TV operators, the idea of trimming down $100 per month sports packages to offer plans that are both more focused and less expensive might seem like a bad way forward. Wouldn't they simply be trading big profits for smaller profits and hastening their own demise? Trudelle doesn't see it that way. Creating plans at lower price points expands overall reach, he says. So maybe instead of attracting 50% of the viewers in a country, they could reach 80 or 90% and monetize differently with plans that go beyond the traditional subscription model.
To see how that can be done effectively, look to Sky in the U.K. Sky offers its full sports package over satellite and broadband, where sports-lovers get all the channels they could want. But Sky has also added OTT options where fans can select a season pass or game pass-or even consume on a more granular level. The conclusion Trudelle sees is that these new options aren't eating into the core revenues of the pay TV offering but are bringing in new subscribers who are interested in flexible viewing options and flexible pricing. It's one example of a player that has tested the waters and seen the benefits of adding complementary plans.
Sports broadcasters need to have an innovation mindset right now: Using multiple channels, including OTT platforms, is one way to reach out to new demographics that aren't interested in pay TV. It's also a way to offer completely new experiences, creating innovations that will lead to as-yet unimagined innovations. With 5G still on the horizon, there are still technical challenges to work out. Latency is one, as is scalability and providing consistently reliable experiences across devices and platforms. Getting it right requires a lot of expertise, as well as working at a regional level, Trudelle says. He sees cycles of continuous iteration, improvement, and discovery pushing the field forward.
Another concern is fragmentation, and it's something the whole ecosystem needs to be careful of. The leagues see the harm, and it's one reason they want to keep broadcast reach as part of their portfolio of content delivery options. With OTT properties, the multiplication of apps and sources of content can easily lead to consumers feeling frustrated and lost. When that happens, some will turn to pirate services simply to get everything they want in one place. The industry needs to focus on the end-user experience, Trudelle warns, making sure that fan engagement takes place, people are connected to brands, and fans can easily access services.
When all the pieces are put together correctly, operators will be able to reach more fans than ever, and fans will find a deeper level of engagement with their favorite teams than they ever could in the pre-OTT days.
There will be growth in OTT in the years to come. This is the direction that the industry and the consumers are taking, Trudelle says. More consumption on mobile devices for sure, and also a consumption of content that needs to happen over a period of time. So, it's not just sitting down on a Saturday to watch the event, but it's beomg able to stay up to speed with everything happening with the sports you loved throughout time. It's the storytelling around it; it's the overall experience over the season.
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The Future For Media Companies Must Be Flexible, Says NAGRA Report By Troy Dreier, Contributor, Streaming & Digital 
